Causal Relationship between Foreign Capital Inflows and Economic Growth: Empirical Evidence from India
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| Author | Narayan Sethi |
| ISSN | 2225-7217 |
| On Pages | 65-69 |
| Volume No. | 2 |
| Issue No. | 1 |
| Issue Date | March 01, 2020 |
| Publishing Date | March 01, 2020 |
| Keywords | Private Foreign Capital Inflows, Macroeconomic Variable, Vector Autoregression (VAR), India |
Abstract
The present study attempts to examine the casual relationship between foreign capital inflows and economic growth in India. Using the pair-wise Granger causality test (1969), this paper specifically examines casual relationship between foreign capital inflows and economic growth in India. The important observations emerge from pair-wise Granger causality test which shows there is the long-run equilibrium relationship is restored between the following pairs of variables viz., economic growth and Foreign Direct Investment (FDI), economic growth and Foreign Portfolio Investment (FPI).
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